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Pricing for Chocolates

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58 replies to this topic

#1 Tweety69bird

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Posted 31 August 2005 - 05:56 AM

Hi all,
I need some advice what to charge a bakery that is ordering some chocolates from me. I still don't know what the quantity will be, but lets say it's about 150-200 pieces, and about 5 different flavours. I think the best way is to come up with a price per piece. I am concerned with charging enough to make it worth my while, yet not too much, as the bakery needs to make thier profit as well. Suggestions???? Thanks!
Don't waste your time or time will waste you - Muse

#2 Truffle Guy

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Posted 31 August 2005 - 06:20 AM

Hi all,
I need some advice what to charge a bakery that is ordering some chocolates from me. I still don't know what the quantity will be, but lets say it's about 150-200 pieces, and about 5 different flavours. I think the best way is to come up with a price per piece. I am concerned with charging enough to make it worth my while, yet not too much, as the bakery needs to make thier profit as well. Suggestions???? Thanks!

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I think it depends on what kind of chocolates and the quality of the ingredients/finished product. Are they truffles, molded chocolates, artisan chocolates etc? There is no set price as it would depend on what you use and your cost to produce. If you are just trying to get your foot in the door, you may even give a bit of a break to see if it can lead to larger orders.
Another big consideration...are you properly licensed in your state? Are you producing these chocolates at home and do you know their shelf life? I ask because I have quite a few restaurants/candy shops etc that have asked me to produce for them but as its just a hobby now, I don't want to take the legal risk of producing something from home.
Price per piece is probably the best way but be sure to include your time and utilities in the equation. Good luck.

#3 Tweety69bird

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Posted 31 August 2005 - 06:26 AM

Well, I plan to make molded chocolates, maybe using some transfer sheets and hand dipping some ganaches. Not sure what flavours are wanted yet....waiting for feedback. Getting my foot in the door deffinately is a concern, I don't want to seem to steep right off the bat, but I don't want to give my services away either. I'll be making them in my friends cake decorating shop, so not at home. I'm in Quebec, Canada by the way. Thanks for your advice. :smile:
Don't waste your time or time will waste you - Muse

#4 Campofiorin

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Posted 31 August 2005 - 09:36 AM

Hey, where will you be selling your chocolates? I also live in Montreal and I'm always willing to help the "little guy" and would love to try them.

#5 Tweety69bird

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Posted 31 August 2005 - 10:20 AM

Hello fellow Montrealer! For this instance, it's an order for a wedding's sweet table. It will be my first order. I do plan to make/sell on a more regular basis, but I'm not there yet.... not even close to being a small guy yet... but stay tuned... Thanks for the encouragement!!
Don't waste your time or time will waste you - Muse

#6 Trishiad

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Posted 31 August 2005 - 02:30 PM

Alright Tweety,
I know you were looking for a simple answer but you really are going to have to figure out what it costs you to produce these chocolates. Cost of ingredients, cost of travel to fetch ingredients, cost of kitchen rental, packaging and the hardest of all...cost for your time. If you want to give them a break to get your foot in the door it's your labor that you should discount. Remember too that your prices may increase as you grow and become legal (county fees, taxes, insurance...).
Regarding flavors, if it were me I would dictate the flavors. Give them options if you like but you need to have some creative control and some leverage. Let's face it, anyone can get a recipe and make truffles. You should strive to make yours unique in some way so that you become indispensable. If they are unique and yummy enough the price will not matter so much.
To save yourself some money skip buying transfer sheets and do some hand decorating.

#7 Tweety69bird

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Posted 01 September 2005 - 04:43 AM

Trishiad, thank you for your advice. I think that is the most stressful (but fun) part, trying to decide what flavours for each type I try to create, whether to do molded chocolates, or dipped chocolates... I think the dififculty comes from having no restictions. I think I will try to do some hand decorating... the wedding cake is going to be white with pink tulips, so maybe using royal on top with a cornet and make tulips.... I think that is more impressive looking than the transfer sheets, but I am striving for variety also. I totally get it that while I'm starting, I won't make a lot of money, but that it's more important to make a name for myself right now. Plus the practice can't hurt either!! :raz:
I think that what I'm really trying to find out, is what should the ratio be between me and the bakery, when it comes to charging? I mean, on one side I think that, well, I'm doing all the work, and the bakery is just going to deliver the chocolates. On the other hand, I deffinately see that it's the bakery that got the job and if they hadn't contacted me, I would have no job at all. I just want it t be fair on both sides. Thanks to all of you who are giving me your advice. I really appreciate it, and since this is the first time I have started a topic, it's pretty cool. :biggrin:
Don't waste your time or time will waste you - Muse

#8 mart242

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Posted 01 September 2005 - 05:39 AM

What's the typical profit margin for a bakery? 20% max on these since they don't do any work? (just guessing).

So retail price - 20% (or whatever) = your price, as long as you make a decent profit.

Calculating the retail price is easy, just go shopping!

#9 Truffle Guy

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Posted 01 September 2005 - 05:43 AM

A few things I would advise from my own experience. Be careful on flavors, while the people in this forum may appreciate a Passion Fruit Pate de Fruit layered with a ganache and then enrobed, the buying public may not. Keep it simple in starting out. Remember your audience. If you are going with 5 flavors then I'd suggest something from below:

Dark Chocolate Ganache (you could throw some nibs in if you want)
Amaretto/Almond Ganache (pretty safe but be sure to advise of nut content)
Hazelnut (again remember nut allergies)
Grand Marnier/Orange (could be white or dark ganache)
Raspberry/Chambord (people love dark chocolate and raspberry
Vanilla Bean (again you could use white ganache for striking presentation enrobed in dark)
Coffee/Cappuccino (either works but cappuccino with the cinnamon is less harsh)

I'd also be careful about dictating to a buyer, give them options that you are comfortable with providing. Its not the recipe that makes truffles/bon bon's great anyway (although they help), its the quality of your ingredients. The combination and blending of flavors is the key, there are no magic recipes, we all do the same thing.

Also, if you have them, transfers are far more economical than doing something by hand. It's like ironing a shirt, you can do it for free instead of paying $1 but if it takes you 10 minutes, you are saying your time is only worth $6 an hour. Transfers are easy and beautiful and most consumers find them more attractive than hand painted decorations. If you have molds you can use colored cocoa butter for designs but again, it takes far more time than transfers. Also, you don't want your decorations to take away from the flavor of the chocolate so I wouldn't pipe anything on top of them, it compromises the flavor.

If you want to do something really fun (and easy) make mice truffles using almonds for ears and then enrobe and you can pipe on the face and use licorice, silk, orange peel etc. for the tail. At the heart it will still be a delicious truffle.

Again, I strongly stress you understand your audience. If you were presenting your chocolates to a chocolatier contest, then feel free to use lemon grass/saffron/wasabi etc for exotic flavors but if its for Earl and Ethel coming in to get a donut, give them something they will appreciate. People only will disappoint you with their reactions to your truly creative recipes, save those for conniseurs.

Are you using molds, rolling or cutting the ganache? I'd make sure to let it set first before finishing the enrobing. If you do everything in a few hours, you probably aren't going to get the best product. Also, how are you storing the product? Will it be in a temperature controlled environment/case at the bakery? These things should be considered also as well as letting the baker know they have a 2 week shelf life. Again, good luck and I'd suggest start with simple yet powerful (and familiar) flavors. If you do them cheaply (or even free) just let the baker know you want to let them see how they sell before quoting a price. Don't get locked in to anything until you see the demand. Also the price they are being sold for determines how much your client is willing to pay. Post some pics when you are done!



Trishiad, thank you for your advice. I think that is the most stressful (but fun) part, trying to decide what flavours for each type I try to create, whether to do molded chocolates, or dipped chocolates... I think the dififculty comes from having no restictions. I think I will try to do some hand decorating... the wedding cake is going to be white with pink tulips, so maybe using royal on top with a cornet and make tulips.... I think that is more impressive looking than the transfer sheets, but I am striving for variety also. I totally get it that while I'm starting, I won't make a lot of money, but that it's more important to make a name for myself right now. Plus the practice can't hurt either!!  :raz:
I think that what I'm really trying to find out, is what should the ratio be between me and the bakery, when it comes to charging? I mean, on one side I think that, well, I'm doing all the work, and the bakery is just going to deliver the chocolates. On the other hand, I deffinately see that it's the bakery that got the job and if they hadn't contacted me, I would have no job at all. I just want it t be fair on both sides. Thanks to all of you who are giving me your advice. I really appreciate it, and since this is the first time I have started a topic, it's pretty cool.  :biggrin:

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#10 Tweety69bird

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Posted 01 September 2005 - 06:55 AM

Oh Truffle Guy, thank you so much for your suggestions. I really really appreciate all the advice!! :wub: Your mice idea is so cute!!
It's funny, the first flavour I had thought of was passionfruit! Once the baker gets back to me with quantities, I will give him my list of flavours that I can do, and let him discuss with the client and get back to me with what they want. I forgot to mention that they had said something about wanting some chocolates with a pink filling to go with those pink tulips. I think I'll do those with raspberry. I have metallic red cocoa butter that I got in recently from Chef Rubber, and I haven't tried to use it yet, so this will be the perfect opportunity...although pink and red don't go...maybe to add some colour to the dark chocolates... I just want to break it out and use it... I also have Mycryo that I can colour...(I do have to temper that right???), so I have plenty of options.... I deffinately will have to do a practice run and give them out to local "Joe's" to see how they are received. You are right about the exotic flavours... I don't want to freak out anyone! I will make sure to use the best ingredients that I can find, absolutely. The way I choose to look at it, is that I'm investing my time, energy and money into building a name for myself, it's not about making a profit at this stage. As for the decoration, I have some transfer sheets already, so I'll use some of those on the ganaches I dip, as well as molding and I deffinately will post pictures when all is said and done. I am so looking forward to playing with all of this and seeing what I can create!!
Don't waste your time or time will waste you - Muse

#11 Tweety69bird

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Posted 01 September 2005 - 07:03 AM

Forgot to mention that I think I'm going to stay away from any nuts on this job. Since it's going to be on a wedding's sweet table, there's just too much risk there, and I would hate to have anyone have an allergic reaction.
Don't waste your time or time will waste you - Muse

#12 Trishiad

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Posted 01 September 2005 - 07:34 AM

For the record, I wasn't suggesting that Tweety send wasabi truffles to the wedding. I was suggesting that her flavors be unique. Not all raspberry chocolates are equal. Flavor everything with liqour and it all starts to taste the same. Flavor everything with jams and marmalades and they all start to taste like sugar. My point is find a great recipe, modify it to make it better and then use the best ingredients you can find/afford/support to produce your product.
As for transfers and other decoration, when you're starting out one more albert uster order can really break the budget. And, while time is money, you can spend as much of your time creating something memorable and building your name/image/awareness without typing in your credit card number. I wouldn't pipe icing on your chocolates unless that's what your audience likes (and it may be). I was thinking about lustre dusts, cocoa butters, chocolate placques, hand stringing, and the like.
And back to flavors, passionfruit is pretty mainstream at this point. You probably can stray from the raspberry, amaretto, orange basics if you want to. Most chocolate eaters are pretty slutty and will eat just about anything you give them. Make mint with fresh mint or mint tea instead of the typical oil or booze, they'll still devour it and think you're amazing at the same time.

2 more cents: sure the mouse idea is cute. L.A. Burdick is making alot of money with those mice. Be yourself, the money will follow.

#13 Tweety69bird

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Posted 01 September 2005 - 08:59 AM

I love wasabi! :biggrin:
Don't waste your time or time will waste you - Muse

#14 lovkel

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Posted 04 September 2005 - 07:39 AM

I was thinking about lustre dusts, cocoa butters, chocolate placques, hand stringing, and the like.

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Not to distract from the main points of the thread, but this hits on a question I've always had. I really like using luster dusts on molded chocolates. I've never had a problem feeding it to my family (they don't pay and unlikely to sue :smile: ); however, I 've always been somewhat skittish in supplying it to paying customers. Is the stuff food grade?

I've read somewhere that according to European standards its fine, but according to the American FDA its considered for decoration only. I'm also just starting out and would hate to be hammered by some overzealous bureaucrat.

#15 Trishiad

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Posted 04 September 2005 - 08:35 PM

many chocolatiers are using them and they seem to be all over wedding cakes. monkey see, monkey do (this monkey anyway)

#16 Desiderio

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Posted 25 May 2006 - 09:28 PM

I know my sounds silly , but I would like to know what kind of standard some of you guys use to priced your products( chocolates in this case).
I have been selling most of them in a small circle ( growing faster ) of people,and I always try to keep my price fare and square.I am not aiming at the profit at the moment since I am starting and I am more concerned with having people know me and create a market ( and see if there is one after all ).All the entrance from the chocolates ofcourse go back to the chocolates, and if I can make enough for me to reinvest in what I spend I am happy with that.
The question is,how do you really price your products once you getting more business?I am trying to do a standard price ,but should i price them by the lb or by the number?Should I price the chocolates and then add the costs of the packagings ( boxes ,ribbons , candy cups etc.)?Do a standard price for all the chocolates without differences ( to avoid to go crazy :raz: )no matter the ingredients ( like nuts ,liquors etc that are more expensive).

If there is any source I can look up into please let me know, I really would appreaciate it :smile:

Thank you
Vanessa

#17 sote23

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Posted 25 May 2006 - 11:54 PM

I know my sounds silly , but I would like to know what kind of standard some of you guys use to priced your products( chocolates in this case).
I have been selling most of them in a small circle ( growing faster ) of people,and I always try to keep my price fare and square.I am not aiming at the profit at the moment since I am starting and I am more concerned with having people know me and create a market ( and see if there is one after all ).All the entrance from the chocolates ofcourse go back to the chocolates, and if I can make enough for me to reinvest in what I spend I am happy with that.
The question is,how do you really price your products once you getting more business?I am trying to do a standard price ,but should i price them by the lb or by the number?Should I price the chocolates and then add the costs of the packagings ( boxes ,ribbons , candy cups etc.)?Do a standard price for all the chocolates without differences ( to avoid to go crazy  :raz: )no matter the ingredients ( like nuts ,liquors etc that are more expensive).

If there is any source I can look up into please let me know, I really would appreaciate it  :smile:

Thank you

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i'm in the same situation, i would like to hear the answer as well. i know alot of companies out there are charging way more than they should, considering what chocolate they are using.

#18 dejaq

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Posted 26 May 2006 - 01:52 AM

Hey there,

I am going to try to answer your questions in a couple of parts;

I think Kerry Beal might be of some help because she is actually down in the trenches right now. When I had Pirouette back in Timonium in the late 90's we were high end, I mean Psychotically high end, my immediate competition was an Austrian that had a well-established reputation, but primarily sold retail, our focus was wholesale and corporate.

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You have to understand that what I am about to say in no way should be taken to heart, chief-listen, you have to approach confectionery artistically, but at the same time keep a profit motive anchored in your head. Confectionery and Chocolate manufacture is not for the tame,
It in my opinion one of the most highly evolved eloquent facets of this industry, if you take a look at the dimension cuts down to the millimeter, the ultra tight tolerances of lamentation, how for example, something has to be made to parabolicly fit within a package cell each and every time, the logistics are nauseating. If there were a scale of difficulty from 1 to 10 with 10 being the most difficult, Pastry would be around a 3 chocolate sits up around a 7 or an 8.

You have to ask, how am I going to sell it?
To whom is my market?
Who am I going duke er roo with out there?

Ask yourself those questions before you come up with an arbitrary price point.

Make sure you cover your costs-I mean all of them, right down to the blessed 3M Post it's, I am not kidding, you can lose your shirt if you are not careful.
Do not broadbase your pricing infrastructure, unless your like some of "those" pretentious big name companies that formulate one variety, and simply swap out the flavor continuity, on each production run, if you are one hundred percent discrete on formula profile, naturally you would individually price your chocolates accordingly.
One more thingy, Americans are sold on gimmicks, fancy packaging, colorful bows, fancy shmancy decor multicolored moulded stuff these days, if you sell with the only intent to promote your line thru aesthetics (like some pretty big guys out there
Circa -Now) you may not only find that your market is lukewarm; your bottom line is going to be lackluster as well.
What I am trying to say is unless when you bite into one of your chocolates, and you don't feel your biting into a little piece of heaven, you may have to re-evaluate everything, analyze the science of the way chocolate hits the taste buds on the palate, and you will do well just as we did, the only problem with Pirouette was, I started it on a shoestring...the next time I do this...it will be different.


Michael :wink:

#19 Kerry Beal

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Posted 26 May 2006 - 05:49 AM

I'm not really in the trenches, I have a day job that allows me to make chocolate and not worry about paying my mortgage, but I'm happy to provide my thoughts on pricing.

First thing I'll suggest is not to underprice yourself at the beginning, because it is difficult to raise your prices later on. People will pay good money for premium chocolates. I have a friend who does market research and says that women particularly will always pay money for makeup and chocolate even when the market is in a downturn.

There are always going to be people who look at your little box and say "$10.00 for that, I can go to Laura Secord and get twice that much for half that money" to which I say "go ahead". Once they taste my chocolate they usually come around, but some people think drug store chocolate covered cherries are wonderful.

So you have to take into account not just your supplies. Michael is so right when he says figure it out right down to the sticky notes. This is not charity (or hopefully won't be after a while).

There is the cost of your molds, which will have to be amortised over a number of jobs (or if someone wants a special mold for their wedding, I would just add the mold cost into the price). You have to allow for stock costs ie you may only have to use $1.00 worth of liqueur in your recipe, but you have to buy and store a whole bottle (love those little airplane sized bottles BTW, bring them back from all my holidays). You have to allow for the cost of all the samples you provide when people want to taste what they will purchase, also sampling gets customers. If you want someone to spend more than they normally would on chocolate, they have to know they are getting superior goods.

Packaging costs a lot! Don't forget to allow for the cost of your labels, your business cards, the little gold bow that you close the box with. It's great to get a generic box and just use your label to identify it. Much cheaper than hot stamping, can buy smaller numbers of boxes and can look quite smashing.

Don't forget the cost of your time! You probably won't be making much initially.

You have to allow for the charitable donations that people will hit you up for. Don't forget to provide lots of business card with them. Look at these donations as a chance to get people tasting your chocolate and to bring in business.

Also, explain to people when they ask you to give them a better price if they buy 100 rather than 1 that there is no economy of scale in handmade chocolates. 100 pieces are 100 times the work. (Of course if they buy 100 boxes you throw in some great thing to thank them and get them to come back).

I don't make my chocolate money selling chocolate, I make it from selling educational video on working with chocolate and supplies such as molds and bulk chocolate, but I have helped a couple of people who I have taught and who have chocolate businesses with their pricing. I do sell some chocolate at certain times of year or if special requests come in so my basic prices are about $1 each for truffles or molded chocolates. If I package 3 large caramel frogs in a custom plastic box, which includes label, two gold labels to hold it closed I charge $7.50. For 3 tiramisu mice in custom plastic box, also label, gold labels to hold it closed, also $7.50 and I could probably charge $10 for it and people would pay. 6 truffle in a custom box, label, gold elastic tie $10. cost to make without labour is less than $2.

#20 alanamoana

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Posted 26 May 2006 - 06:48 AM

Vanessa, thanks for posting this question.

After you all saw the production I did for my friend's wedding, the same thoughts ran through my head. How can I make this work as a business? Do I want to make this work as a business? Am I CRAZY?!

With any business, you have to really, REALLY take into consideration the amount of time you spend. Your labor is probably the one most important factor people probably forget about because it is intangible. Don't just focus on the food cost.

Because of custom wafers for my friend's project, just the cost of goods/food/packaging/shipping was about $1200 !!

But if she had bought those from any retailer (high or low end), it would probably have been closer to $3,000. And I got an employee discount (even more than wholesale) on the bulk purchase of chocolates and feuilletine via a connection. So, she really got a deal.

Vanessa, just go to any and all chocolate web sites you can find and start to compare. Look at what they're producing, compare, contrast, etc. Then look at your market and as Kerry says, it is difficult to raise prices, so even though you are doing "market research" it will be skewed because you're charging at cost right now.


Christopher Elbow
Norman Love
Chocolat Moderne
LA Burdick
Michael Recchiuti
Christopher Norman

Thse are just a few aside from the many sites among eGulleteers, and commercial chocolatiers like Godiva and stuff. It is great to get as much information as you can.

#21 cotovelo

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Posted 26 May 2006 - 07:40 AM

I thought I would put in my 2 cents here because I have made many mistakes while starting my company.
One mistake I made was looking at the chocolatiers that have products at this level and trying to mimic their prices, or at least get close. But not all cirumstances are the same, (.e location, market, etc...). I just got back from New York and couldn't believe that I was paying $2.25 to $2.50 for a single piece of chocolate, granted some of them were good. But you have to think about what kind of rent they pay, how much their labor is and just doing business in market like that. It makes me love Kansas city because cost of living is very reasonable.
I couldn't get away with charging that much here, even if I felt my products was just as good. I still think that we are one of the better values among this market. I have wholsale customers who sell my chocolates for much more than I do!

Here is the catch though, people look at price and make a judgement before they even consume the product, "If something is more expensive, then it must be better". The psychology behind marketing and pricing can be very tricky. Hopefully after time the consumer will become more educated and be able to filter through all the marketing and packaging and judge what is inside.


I sell mine by the piece instead of by weight. We have some pieces that are smaller but they take just as much time to produce as the larger pieces, and labor is the most expensive part of a piece of chocolate no matter where it is produced.
It is true also that raising your price is difficult after you get started, I went through that so give this a lot of though before you set your price point. Do a thorough cost analysis, taking into account every expense. Like was said before, this is not a charity, you do need to make a living.

Sorry for the rambling email but this is a very challenging aspect of the business and hope I have helped a little.

Christopher

#22 escry

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Posted 26 May 2006 - 07:55 AM

Kerry is absolutely right - it is much easier to lower your price than raise it - start HIGH and come down if necessary.

Secondly, if this is to be your livelihood, then it’s got to pay - at least eventually - price such that future anticipated volumes will pay ALL the bills (chocolate, post-its, electricity, capital depreciation, capital investment, and repaying your first three years effort which went unpaid!), AS WELL AS pay yourself (at last) AND provide an additional profit margin - you are taking a risk, may well lose a lot of money, and must factor in an additional return for this risk.

Thirdly, FOCUS, FOCUS, FOCUS. You are not going to compete with Hershey, nor with Godiva, so even if you were not the perfectionist that I am sure you are, you are only left with the top end of market. Not only should you chocolates look delicious, they should be beautifully packaged (Michael's point exemplified by his beautiful packaging). They should also sound different/enticing/unusual. For me and my market (at least at the moment) that has been losing the familiar (raspberry, lemon, rum & raisin, cognac, ...) and offering the unusual (lavender, chile, verbena, Darjeeling tea, ...).

Fourthly, as Kerry alluded to, there are little to no economies of scale as an artisan chocolatier. This has one great advantage. It allows you to keep costs very low and spend a year or two refining your processes, keeping all receipts (even those post-its), and acquiring suppliers as close to the point of production as possible. Become El Rey's (or whoever's) smallest customer rather than buying through a distributor if at all possible. During this time you will lose money on every chocolate you sell. Once your processes, product and pricing are right you will be making money on each chocolate. Now is the time to grow, ie grow profits not loses!

An example

I know a small scale chocolatier (shall not say who!) whose pricing deliberations look something like this:

Q: With whom would I like my chocolates to be compared?
A: La Maison du Chocolat (£59.90 for 570g); L'artisan du Chocolat (£18.50 for 250g); ...

Q: Who are my customers?
A: Delicatessens, chocolate shops (typical sector mark-up 35% to 50%, net of sales tax).

Q: Given my distribution channel and chosen points of sale can I sell my chocolates at the same price as those sold through chocolatiers' own London Boutiques?
A: No, the shopping experience is not as 'exclusively chocolate'. Discount achievable price by 20%.

Q: What then are my retail and wholesale prices?
A: Wholesale (£9.80 for 260g); Retail (16.50 for 260g = £9.80 wholesale price plus £4.24 mark-up at 45% plus £2.46 sales tax/VAT at 17.5%).

Q: What are my marginal/variable costs of producing a 260g box of chocolates (my selling unit)?
A: Food ingredients £1.86; plus packaging £1.89; plus delivery to customer £1.25; plus labour £3.11 = £8.11.

Q: What are my fixed costs?
A: Premises £330 pcm; plus £120 pcm capital allowance; plus marketing £270 pcm = £720 pcm.

Q: How many 260g boxes of chocolates must I sell to break-even?
A: 720/(9.80-8.11) = 426 boxes.

Q: If I must make 426 boxes in an average week to break even, how many must I make in each of the weeks running up to Christmas
A: 4000 to 5000.

Q: Can I make 4000 boxes in a week, using my current equipment and processes?
A: No.

Q: Am I yet profitable?
A: No.

#23 Sugarella

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Posted 26 May 2006 - 07:57 AM

After you all saw the production I did for my friend's wedding......

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I missed that....is there a link?


I agree that you should charge your regular prices, even when just starting out, even with family and friends. Otherwise, you'll be conditioning them into believing your chocolates are only worth $X, and these people will be the beginning of your word of mouth advertising. NOT good!

If you want them to sample more, let them pay full price for what they order or choose to buy, then throw in extras later on.

#24 Trishiad

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Posted 26 May 2006 - 08:43 AM

Pricing is difficult when you're just starting out and even more difficult when you don't have a storefront. If I had a storefront I would sell more chocolates, get better prices when purchasing supplies, have the volume to buy the custom packaging I want rather than spending all that extra time trying to dress up a generic box, have the freedom to experiment more, etc. etc. etc. ( and work tremendously long days and not see my little guy as much as I want to, hence the no store front) Let's face it, it doesn't take THAT much more time to fill 10 molds than it does 2 or 3. We all know that the profit margin increases as production increases. I think that fact is amplified in a business like this where we are trying to use the finest ingredients and keep everything as close to handmade as possible.
I alternate between feeling embarrased when asking for my price and cringing because I know I spent too much time or money on something and won't get the money back.
I have been careful to price my core products knowing that they will be difficult to raise later. Sometimes I run a sale to boost customer base ( I have a friend (okay, may friends) who refer to me as a pusher "first taste is free...") and sometimes I have experimental product pricing. On other products I think I can succesfully raise prices later, weddings for instance. Weddings are also the only thing I give a quantity discount on. Again, because it doesn't take that much more time to knock out 100 extra pieces of one flavor. And because the bigger the wedding, the more likely I'll get more customers. 300 potential new customers in one fail swoop is a good thing.
I think it is important to look at the "competition" and figure out what drives their pricing, labor, rent, ingredients. Sote, sometimes one makes compromises on one ingredient in order to afford another, or because rent in that area is huge and that customer base doesn't demand a more superior chocolate. One of my best sellers is a complete no brainer made with moderate couverture, people beg for it. Sometimes you must give them what they want.
Big question. So many answers. I suggest you spend as much time selling directly to the consumers (eaters) as possible so that you can see if you've priced correctly.

#25 escry

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Posted 26 May 2006 - 09:50 AM

I second that. I started by selling direct to the consumer in whatever way I could, excepting that I did not have a shop. Lost shed loads of money, but learnt so very much.

One third of my business is still direct to the consumer. Not the more profitable, but certainly the more valuable.

#26 Tarek

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Posted 26 May 2006 - 09:52 AM

Soooo, how can I get my hands on some of these chocolates?

Tarek :raz:

#27 Desiderio

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Posted 26 May 2006 - 11:22 AM

Well what can I say, so many great people giving their personal experience feed back and their precious time to answer, so first of all I want to thank you all so much for this .
I indeed want to at least try to turn all this passion ( been there for over 15 years and I think its time for me )into something more than just a highly demanding hobby :raz: .\
I know how it works more or less into the food industry , my parents owned a restaurant back in Italy, and I remeber my parents spent their entire day in that place , everything had to be made by scratch ( I made the desserts and breads ),and I have to say that they didnt turn out rich :sad: but that was my dad's dream and I am glad they tryed , they would had to be in the market for longer time in order to make out the real money but thats another story .
Pricing indeed is one of the hardest things for me , I always feel guilty to charge money and so on , but My chocolates are special,in this market I really have a shoot here you can't find the type of chocolates that I offer around here ,and my costumers know that.Another thing I have started the selling into an welthy enviorement ,and my costumers are not too worry about the price more or less ,I also noticed that I can tell I have some affecionados that always come back weekly for their chocolate overdose ,so I understand my chocolates hit a certain type of market ( medium high class if I can say that ).I understand that in a[place where there is no the same product can be good and bad at the same time becasue if on one side there is room for my products on the other higher quality means higher prices and people my not understand the difference between a chocolate made with marckens ( or something ) brand and an El rey or so quality.
I dont want to adjust my standard to the costumers in this matter I am pretty committed , I love to work with fine ingredients , expecially good chocolate ,and the freshest ingredients.I may be silly on this but I think that most of you guys think the same,I wont sell a chocolate that I dont like and enjoy and I think we are our own judge.
I think I need to be more sure of what I do and just sit down at the table and calculate all my expenses ( I do keep all my recipiet for everything I buy for the chocolates)and then set prices and keep them that way , without feeling bad for my prices because all I made its hand made with the highest ingredients I can afford and all the passion I have , and like you guys have said if you sell your product at certain price and ofcourse the quality matches it people will be enticed byt that as well.
Well I am glad we start this thread , thank you so much for all you inputs!!
Vanessa

#28 dejaq

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Posted 26 May 2006 - 11:33 AM

Vanessa,

we have had some some outstanding advice from some folks, that clearly have a grip on what it takes to prevail, three more things I would like to note, don't discredit unique "out of the box" marketing, I used to know someone that worked as a cival servant in administration, around the holidays IE Christmas, I gave out a few, and I say that cautiously, few samples, they flew off the shelves, once people tried them and word spread. Also by or before, a retail brick and mortar instalation which I feel is critical to the benefit of any high profile (prestige) venue, you would do well by attempting to market to a smaller more elite line of retailers, I am talking about the 4-5 unit gourmet type retail outlets in your area, we sold to (at the time)Sutton Place Gourmet, and all of sudden in one day, you could be moving 4000+ units in a single shot, are you ramped up for that type of production? do you funtion well with no sleep for three days straight? you get the idea...One thing about dealing with brokers, and selling to a "chain" count on the markup being at 100% that means an 8 oz box selling for 19.99 has to be sold to them for less than 10.00-your box alone may cost you 4.50 including shrink wrap, you see it all adds up.The big boys exploit this by tricking out their packaging and loading it up with fluff, once the consumer tastes "really" the way it should be, they are hooked for life, and there from that point on, is a new gauge that has been set, ever after...that's ok confectionery has profit margins in the 300-400% range, if that is, you know what you are doing...


M :wink:

#29 sote23

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Posted 26 May 2006 - 01:12 PM

I thought I would put in my 2 cents here because I have made many mistakes while starting my company.
One mistake  I  made was looking at the chocolatiers that have products at this level and trying to mimic their prices, or at least get close.  But not all cirumstances are the same, (.e location, market, etc...).  I just got back from New York and couldn't believe that I was paying $2.25 to $2.50 for a single piece of chocolate, granted some of them were good.  But you have to think about what kind of rent they pay, how much their labor is and just doing business in  market like that.  It makes me love Kansas city because cost of living is very reasonable.
I couldn't get away with charging that much here, even if I felt my products was just as good.  I still think that we are one of the better values among this market.  I have wholsale customers who sell my chocolates for much more than I do!

Here is the catch though, people look at price and make a judgement before they even consume the product, "If something is more expensive, then it must be better".  The psychology behind marketing and pricing can be very tricky.  Hopefully after time the consumer will become more educated and be able to filter through all the marketing and packaging and judge what is inside.


I sell mine by the piece instead of by weight.  We have some pieces that are smaller but they take just as much time to produce as the larger pieces, and labor is the most expensive part of a piece of chocolate no matter where it is produced.
It is true also that raising your price is difficult after you get started, I went through that so give this a lot of though before you set your price point.  Do a thorough cost analysis, taking into account every expense.  Like was said before, this is not a charity, you do need to make a living.

Sorry for the rambling email but this is a very challenging aspect of the business and hope I have helped a little.

Christopher

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hi christopher,
do you charge one price regardless of piece, or does each piece cost a different amount?
how did you go about doing an analysis? did you hire someone or did it on your own?

I've heard good things about your chocolate. I will be making a trip on sunday to cocoa bella in san francisco, which i understand sells some of your chocolates. Any recommondations on your favorite ones?

Edited by sote23, 26 May 2006 - 01:23 PM.


#30 sote23

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Posted 26 May 2006 - 01:29 PM

Hey there,

I am going to try to answer your questions in a couple of parts;

I think Kerry Beal might be of some help because she is actually down in the trenches right now. When I had Pirouette back in Timonium in the late 90's we were high end, I mean Psychotically high end, my immediate competition was an Austrian that had a well-established reputation, but primarily sold retail, our focus was wholesale and corporate.

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You have to understand that what I am about to say in no way should be taken to heart, chief-listen, you have to approach confectionery artistically, but at the same time keep a profit motive anchored in your head. Confectionery and Chocolate manufacture is not for the tame,
It in my opinion one of the most highly evolved eloquent facets of this industry, if you take a look at the dimension cuts down to the millimeter, the ultra tight tolerances of lamentation, how for example, something has to be made to parabolicly fit within a package cell each and every time, the logistics are nauseating. If there were a scale of difficulty from 1 to 10 with 10 being the most difficult, Pastry would be around a 3 chocolate sits up around a 7 or an 8.

You have to ask, how am I going to sell it?
To whom is my market?
Who am I going duke er roo with out there?

Ask yourself those questions before you come up with an arbitrary price point.

Make sure you cover your costs-I mean all of them, right down to the blessed 3M Post it's, I am not kidding, you can lose your shirt if you are not careful.
Do not broadbase your pricing infrastructure, unless your like some of "those" pretentious big name companies that formulate one variety, and simply swap out the flavor continuity, on each production run, if you are one hundred percent discrete on formula profile, naturally you would individually price your chocolates accordingly.
One more thingy, Americans are sold on gimmicks, fancy packaging, colorful bows, fancy shmancy decor multicolored moulded stuff these days, if you sell with the only intent to promote your line thru aesthetics (like some pretty big guys out there
Circa -Now) you may not only find that your market is lukewarm; your bottom line is going to be lackluster as well.
What I am trying to say is unless when you bite into one of your chocolates, and you don't feel your biting into a little piece of heaven, you may have to re-evaluate everything, analyze the science of the way chocolate hits the taste buds on the palate, and you will do well just as we did, the only problem with Pirouette was, I started it on a shoestring...the next time I do this...it will be different.


Michael  :wink:

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hi michael,
your chocolates and presentation are top notch. I was wondering what happened to piroutte? How did you come to a price point? Did you get any formal training?
I'm targeting the high end, but need to work on technique etc.

Your right, if the chocolate doesn't justify the price, there is a problem. I've tried more than one highly regarded chocolate and don't think the chocolate was worth the price.

I'm having trouble finding high end boxes such as what you used. any ideas?

sorry for the million questions.

Edited by sote23, 26 May 2006 - 01:37 PM.






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